In 2018, a foreign trade company in Linyi received an order of US $60000 from four containers of plywood from Mexico. The final payment was received more than two months after the goods were delivered. During the period, the company fought with the customers in wits and bravely, and finally came close. To do business with Mexico, we really need to be very careful. If we are not careful, we will fall into a trap, and we may lose both money and goods.
At the beginning of 2018, a foreign trade company in Linyi suddenly received an inquiry from an old customer and needed to buy some plywood. The customer hasn’t placed an order for more than two years. The number of orders is not bad. There was no problem with doing business before. So we negotiated with customers for a round and finally confirmed the order of 60000 dollars. When it comes to the terms of payment, according to the previous practice, Linyi Foreign Trade Company collects 30% of the deposit first, and the customer pays the T/T balance at the sight of the copy of the bill of lading. But this time, the customer proposed to pay 10% of the deposit, and the remaining half opened the letter of credit and the other half saw the bill of lading T/T. It also stressed that Mexico’s plywood import policy has changed, requiring the opening of a letter of credit, and the customs will collect tariffs according to the amount of the letter of credit. The customer’s explanation is reasonable, and the customer is an old customer. They still trust each other. So he agreed to the customer’s request.
When the customer paid the deposit, he asked Linyi Foreign Trade Company to provide a RMB account. Although Linyi Foreign Trade Company felt strange, it did not go into the details. After all, both parties had contract export invoices. Finally, I don’t know how the guest paid about 15000 US dollars to Linyi Foreign Trade Company. (This Linyi Foreign Trade Company should be very careful when doing foreign trade. Part of the national short card action is aimed at the money transferred through the underground bank, which is easy to freeze the bank card and money.) After receiving the deposit from the customer, Linyi Foreign Trade Company produced on time, and the customer also issued a letter of credit of 45% to Linyi Foreign Trade Company, and asked Linyi Foreign Trade Company to make a set of invoices, the content of which is consistent with the actual order, That is, the unit price is modified to match the letter of credit.
When the order was about to be completed, Linyi Foreign Trade Company informed the customer that transportation could be arranged. At this time, the customer said that the shipment could not be made for the time being, and the specific delivery time needed to be notified by them. Linyi Foreign Trade Company proposed that the time of the letter of credit was up, and Linyi Foreign Trade Company could not receive the payment for the goods without shipment. What’s more, the factory was also under financial pressure, and hoped to ship the goods as soon as possible and collect the payment for the goods. But the customer insisted on waiting for their notice, and they would amend the letter of credit. At this time, Linyi Foreign Trade Company began to feel pressure. After all, Linyi Foreign Trade Company only received 10% of the deposit. The customer didn’t want the goods, and Linyi Foreign Trade Company lost a lot. These plywood are best-selling products in Mexico, and other places are not suitable. However, Linyi plywood Foreign Trade Company agreed to the customer’s request.
At this time, Linyi Foreign Trade Company began to be vigilant. After many years of foreign trade, Linyi Foreign Trade Company was still relatively experienced. It also consulted China Export&Credit Insurance Corporation and inquired about the relevant foreign exchange collection risks and premiums. Since the customer paid the deposit and opened the letter of credit, and the goods were in the hands of Linyi Foreign Trade Company, even after the shipment, Linyi Foreign Trade Company mastered the bill of lading, the risk was relatively low, and CITIC’s premium rate was not low, and at the same time, the loss was only 80%. Such premium is too much pressure for export enterprises and basically gives most of the profits to insurance companies.
After more than a month of anxious waiting, Linyi Foreign Trade Company waited for the customer’s delivery notice and the new amended letter of credit. The shipping company designated by the guest is Maersk, which is a large international company, which also strengthens the confidence of Linyi Foreign Trade Company. After all, if no bill of lading is released to the guest without the consent of Linyi Foreign Trade Company, they also have to bear legal liability and compensation liability. The relevant legal provisions of Linyi Foreign Trade Company are also very clear. (The shipping company is very important. If the amount involved is too large, the risk will be too large). The goods were shipped successfully, and Linyi Foreign Trade Company also obtained the bill of lading, and repeatedly stressed to the shipping company that there was no bill of lading to release the goods, which required legal liability. Maersk and Linyi Foreign Trade Company also guaranteed that they would comply with international practices and relevant laws at home and abroad. (It is important to keep a record of relevant correspondence documents).
When Linyi Foreign Trade Company sent a payment order to the customer, the customer asked Linyi Foreign Trade Company to give them a scanned copy of the invoice and bill of lading. Normally, Linyi Foreign Trade Company only provided a copy. If the customer asked for a scanned copy here, it would be possible to pick up the goods through the scanned copy. Therefore, when Linyi Foreign Trade Company provided the scanned copy to the customer, it clarified with the shipping company that the scanned copy could not be picked up. However, at this time, the customer and Linyi Foreign Trade Company said that they could not pay for the time being, because they had stopped at the dock for hundreds of containers without picking up the goods, and the goods of Linyi Foreign Trade Company had not arrived at the dock, so they could not pay for the time being. Need to wait! Linyi Plywood Foreign Trade Company thinks that any export enterprise will be very worried at this time, and has made the plan of returning the goods to China or selling them to other local customers without receiving the payment.
As a result, two months after the ship arrived at the dock, Linyi Foreign Trade Company still did not receive the customer’s T/T payment. Of course, Linyi Foreign Trade Company could not go to the bank to present the documents to collect the partial payment of the letter of credit without receiving the TT payment. In the past two months, Linyi Foreign Trade Company has taken the following measures: 1. Actively contacted with the customers, with a firm attitude, indicating that the bill of lading will not be released unless all the payment is collected. 2. Get to know the situation of the guests through the local Chinese-funded institutions, and inform the guests that Linyi Foreign Trade Company will not receive the payment for the goods, and will report to the Canton Fair and the corresponding departments in China for recordation. 3 Put pressure on the shipping company to make it clear that if the goods are released without the consent of Linyi Foreign Trade Company, it is a fraud. As an international shipping company, it is also influential in the local area of plywood in Mexico and will not cooperate with the customers to pick up the goods without a bill of lading. 4. Through investigation, Linyi Foreign Trade Company also learned that the customer had many domestic suppliers and learned about the actual situation of the customer. 5. Linyi Foreign Trade Company also actively contacted other local customers and consulted the shipping company about the details and procedures of shipping back to China. And disclose relevant information to the guests.
Finally, two and a half months after the goods arrived at the dock, the customer finally transferred part of the payment of TT to Linyi Foreign Trade Company through a private account, and Linyi Foreign Trade Company also received part of the payment of the letter of credit through bank presentation. Although in the end Linyi Foreign Trade Company did not lose anything, it was really a cold sweat. Linyi Plywood Foreign Trade Company believes that the most important thing is that Linyi Foreign Trade Company has legal knowledge. Especially when communicating with the shipping company, Linyi Plywood Foreign Trade Company directly found Maersk’s local foreign general manager in Linyi Foreign Trade Company and communicated with him for a long time. If the shipping company has principles, the goods are still there.
Mexico National Mexico Plywood Terminal has such a policy that if the customer does not pick up the goods for more than two months. The customs has the right to auction the goods, and the original owner has the priority to auction the goods. The auction price is only enough to pay the tariff and wharf fee. If a customer cheats the supplier’s goods through this way, it is impossible to prevent. When doing business with Mexican plywood customers, 30% deposit plus letter of credit (this country must open a letter of credit, which is the regulation of their country), and the letter of credit must be issued by a bank recognized by Chinese banks. This payment term must be adhered to, otherwise the risk is too high.
Foreign trade enterprises are struggling to survive, so they should be more careful. No winter will not pass, no spring will not come – — share with you!
